MBA Offers Detailed GSE Reform Proposal

WASHINGTON, D.C. (April 21, 2017) – (RealEstateRama) — The Mortgage Bankers Association (MBA) today released a white paper GSE Reform: Creating a Sustainable, More Vibrant, Secondary Mortgage Marketwhich provides a detailed picture of a reformed and revitalized secondary mortgage market. It also attempts to shed light on two critical areas that have tested past reform efforts – the appropriate transition to the reformed system and the role of the secondary market in advancing an affordable housing strategy.

“This paper not only lays out a detailed end state solution that will work for the residential and multifamily markets, but also the transition steps to accomplish this goal,” said Rodrigo Lopez CMB, Executive Chairman of NorthMarq Capital and Chairman of MBA. “We look forward to working with Congress and the Administration to find a permanent, sustainable solution to the government’s role in housing finance that doesn’t repeat the mistakes that led to the crisis.”

“Key leaders on Capitol Hill and in the new administration have made it clear that GSE reform should be accomplished through bipartisan legislation,” said David H. Stevens, CMB, MBA’s President and CEO. “While progress has been made during conservatorship, only Congress has the power to ensure lasting reform.”

Specifically, MBA developed an approach to GSE Reform that will:

Inject much higher levels of risk-bearing private capital into the mortgage system, while dramatically reducing the system’s reliance on government support.

Enhance the stability of the mortgage system with multiple Guarantors that will operate as privately-owned utilities.

Protect taxpayers and consumers with a clear set of market conduct rules, prudential requirements, and a new federally-backed Mortgage Insurance Fund (standing behind the mortgage backed securities, not the Guarantors themselves) financed with appropriately priced insurance premiums.

Ensure that mortgage lenders of all sizes and business models have equal access to the secondary market.

Improve service and performance in the secondary market with multiple Guarantors competing on operations and systems development, customer service, product parameters and innovation, and pricing and execution.

Minimize disruption during the transition to the new system by preserving what works in the current system and utilizing the existing regulatory framework where appropriate.

Meet the needs of the full continuum of households, from families requiring the most directly subsidized, affordable rental homes to those served by the completely private jumbo single-family lending market.

Both white papers derive from the work of MBA’s Task Force for a Future Secondary Mortgage Market, made up of individuals from MBA member companies representing a broad cross-section of the residential and multifamily real estate finance industries, including entities of varying sizes and business models.

“The secondary mortgage market plays a vital role in promoting access to credit for prospective homeowners, the development and preservation of affordable rental housing, and support for underserved market segments. MBA’s proposal will help ensure lower housing costs and affordability for all Americans,” said Debra W. Still, CMB, President and CEO of Pulte Mortgage, and a Task Force member. “Furthermore, GSE reform must be done with the objective of maintaining a level playing field for all lenders. The secondary mortgage market is strongest when it is well-positioned to serve the most diverse group of lenders possible, thus promoting broad competition which is ultimately beneficial for consumers. MBA’s proposal meets these complementary goals.”

“The GSEs provide crucial support to the multifamily market. MBA’s detailed end state solution preserves this role and expands its ability to support affordable housing and workforce housing for owners and for renters,” said Michael C. May, Executive Managing Director, Berkeley Point Capital, and a Task Force member.

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field.

Random MBA Press Releases

Commercial and multifamily mortgage originations were up 15 percent for the full year 2017 over 2016, according to preliminary estimates from the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. Data for the fourth quarter of 2017 shows a 9 percent increase in originations over the third quarter, and a 10 percent increase compared to the fourth quarter of 2016.

Recent MBA Press Releases

David H. Stevens, CMB, President and CEO of the Mortgage Bankers Association (MBA), released the following statement applauding Senate Banking Chairman Crapo (R-ID) and the bi-partisan coalition of senators that worked to ensure passage of S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act.